Measuring Satisfaction

This has been an annoying issue for me for a long time. Sort of like a piece of food caught between your teeth and no matter how hard you try, you can't pry the little bugger out.

What is exactly does it mean to be 'satisfied' and how do you know?

That's a rhetorical question - in as far as I can pose it, but I don't expect an answer. It's like asking how long is a piece of string to five people holding different strings. If they all got together they might come to a consensus on what long and short was, but individually, they have no idea.

I can see they survey question now.. "Thinking about what you know about string, on a five point scale where 5 is Very Long and 1 is Very Short, how would you rate the string you are holding?". You would get a bunch meaningless data.

Yet, this is the way many businesses measure satisfaction.

Or, you could ask The Ultimate Question - "Would you recommend this string to a friend?". Perfect solution if only everyone's definition of 'friend' and 'recommendation' were the same. In the digital age, someone with 400 FaceBook friends and 2,000 Twitter followers who throws links around like candy is doing something radically different to two neighbors chatting over a fence or two colleagues having a yarn at the water cooler.

What about "Does this string exceed your expectations?". Same problem. It all depends on where your expectations were to start with. I had a heated debate with a Phd about this a while back. He was vigorously arguing the 'expectations' PoV. I was trying to point out the data we were getting was not that useful. He convinced me we weren't using it properly. So we started using it properly. It was still useless (this taught me that you should never bother arguing against something someone has built a successful business selling - you can either believe it or not, just don't try to argue with them, you will lose).

You can go down the list of ways to measure satisfaction - satisfied or not; recommendations; exceeding expectations; likability; happiness; contentment - they all fall on the sword of context. People interpret them in different ways. And in aggregate, they don't mean much.

So we come back to square one. What does it mean to be 'satisfied' and how do you know?

I am going to try and craft an answer to this over the next few blog posts - of course, my answer might be as equally flawed, but I really feel the need to try and get this out of my teeth.

Remember, I have moved sites, www.insightbydesign.com is my new home!

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Corporate blogging done right

So after my last post on the Forrester Research survey on Trust and Corporate Blogging, I got contacted by a Corporate Blogger!

I mentioned Joel Spolsky's blog Joel on Software in the post and got an email from Dan of Fog Creek Software - Joel's Company. He said thanks for mentioning Joel's blog in such a nice way, and offered me a free copy of Joel's book - "Smart and Get Things Done".

So not only is the Joel on Software blog one of the best corporate blogs around, it is also actively listening to and following up with the blogging community. A nice touch. And a good example of corporate blogging done right.

To top it all off, Joel actually signed the book on the inside cover:

"To Paul,
Be smart!
Get things done!
Eat Fruit!"

I am way ahead of you on that third one!

And to all those Marketers out there that might scratch their head and wonder how a CEO of a software development company can add anything to the Marketing world, Seth Godin called the guy a "genius". I don't think Seth throws that term around a lot.

So Joel's book is squarely on the top of my reading list. From a brief mention in a blog post, to a follow -up email, to a free book, to a review of the book I will post down the track. That's how it all works.

That's how you build trust.

Remember, I have moved sites, www.insightbydesign.com is my new home!

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Trust and Corporate Blogging

There has been a bit of a flutter lately about the whole issue of Corporate Blogging.  A recent post from Forrester Research on their Groundswell blog highlighted some data that showed only 16% of people trust Corporate Blogs.

"Company Blog" is way down the bottom there.

I am only going to make two comments about this.

Firstly, I think it's right. Not that all Corporate Blogs are disingenuous, consumers simply have no way to sort out truth from fiction. We find it hard to trust things that have no transparency mechanism built in. We trust online reviews because of the power of consensus - not because we trust an anonymous individual's single experience. We trust email from people we know because they probably have a track record with us. Just like we trust individual bloggers we know are experts in a field.

We don't trust social networking profiles because just how sure are you that that cute girl who is a friend of your best friend's best man really does LOOK that cute in her picture? We all try to add a little pizzaz to our profiles, right?

My point being that it is very tough for a corporate blog to reach a high level of trust with no transparency mechanism. With no way for readers to easily sort fact from 'fact' (the corp comm. version of 'fact').

I think the only way for a blog to do this is to be genuine. One of the best corporate blogs I read is from Joel Spolsky - the CEO of Fog Creek Software. He writes in a genuine way that invites trust. He also writes more about 'how' his company does things rather than 'what' they do. About human things rather than corporate things.

The second point (ok, so maybe it's the third) is that this is an awful survey question. Context matters in surveys. If you include items such as 'personal email' along with items such as 'company blog' on a scale of trust, you are dooming the company blog in the results. Why don't we just add 'the person who bought you into the world and taught you all you know - usually your, Mother' to the list? Then we would really see 'company blog' sucking the pavement!

We have spheres of trust that don't overlap. How I think about a company blog in the world of communications from brands is vastly different to how I think about and use personal email.

There is no way you can interpret this result as only 16% of people trust Corporate Blogs. There is actually no valid interpretation of what that 16% represents given the vastly different items in that list. But alas, I can feel it making its way around the web as I write...

Remember, I have moved sites! www.insightbydesign.biz

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Back Blogging!

I know, it’s been a while, but I have finally sorted out my new blog site.  It’s www.insightbydesign.biz.  

Yes, it’s bland.  I deliberately chose the blandest theme I could.  I am thinking of it as a blank slate at the moment - one I can edit and update as I go.  

I am going to be joint posting here and on the new site for a while.  Just to give everyone some time to change over RSS feeds, links etc.  Please do.  I would hate to lose any of my cherished readers!  

It has been a hectic couple of months.  Very busy on the work front; scrambling to find long-term accommodation in San Francisco; and wife frantically looking for a new job after the move from out East.  Happily, we now have accommodation and the wife is gainfully employed.  A heavy weight off our shoulders - especially in this economy.

So with everything calming down and me finally getting a more permanent office space, I will be back blogging!  

To be honest, it has been a good break.   For a while there I was struggling to come up with things to write about.  I ended up feeling compelled to update for update’s sake.  Which is not the best way to write a blog.

I’m feeling a lot more energized now.

Hope everyone is well.  

A belated Happy Thanksgiving to all my American friends!

New RSS feed for Google Reader here.

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New city, new blog...

Well, we arrived in San Francisco after 3000 miles of driving, site seeing, eating, more driving, picture taking, more site seeing and yes, more eating.

It was a great trip.  I would recommend anyone who wants to see the US do at least some sort of tour of the interior.

With a new city comes a new blog site.  I have been meaning to move this over to WordPress for a while and I have almost, not quite but almost, finished the site.  It has a lot more information about me, my business and some of the work I do for various clients of mine.  

As soon as the new WordPress site is up and running, I will be imploring all of you to move over there - bookmarks, RSS, etc.  I will be updating both sites for a while until everyone has made the jump.  I wouldn't want to lose any of you!

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Greeting from North Platte, Nebraska

So we have made it to half-way on our trek across country.  We're currently in North Platte - a smallish town in the center of Nebraska.  

Unbeknownst to me, North Platte is home to the largest railway sorting yard in the world - the Bailey Yard.  I never even knew trains needed sorting, go figure.

It really is an impressive site though.  Thousands of trains come and go every day and all sorts of goods pass through the yard.  The picture above was taken from a tower created specifically for viewing the yard.  It's 8 miles long so you kind of need a vantage point to take it all in.

It has been a surprisingly easy trip so far.  We've had some great weather though - so knock on wood that continues.

I might get one more update in before we hit San Francisco.  Then the travel posts will stop - I promise :).

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On The Road...

Well, we finally got on the road to San Francisco.  My wife and I are moving out there for good and we left last Friday for a 12 day vacation road-trip across this great country.

I'm in a hotel in Des Moines as I write this post, having just traversed half way across Iowa. Before that we had a day in Chicago, and before that a night on Lake Erie.

We passed through Ohio on the way.

There is a lot of corn out here.  Vast landscapes filled with corn fields - as far as the eye can see. No, literally, as far as you can see.  It's corn all the way to the horizon.

I have friends who are from this neck of the States and until now, I never quite appreciated what it would be like living out here.  Everything seems dwarfed by the sheer scale of the agricultural architecture.  The mid-west is one huge farm dotted with occasional cities.

The people are nice though and the drivers are excruciatingly polite - after driving around NY/NJ for 5 years, you come to rely on a certain level of rudeness to grease the wheels.

We have a lot of driving ahead of us though.  I will try and update the blog a few more times as we go.  

San Fran still seems like a long way off...

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Customer Recency

There is a site called the KPI Library that lists Key Performance Indicators for a range of business areas.  It's a community site of sorts so the KPI suggestions largely emanate from users (as far as I can tell).

It is somewhat of a strange concept - a whole bunch of unrelated business areas submitting performance management goals - yet seems to work.  Although the 'community' aspect has a way to go as I can't seem to find a lot of discussion about the KPIs on the site.

Which is a shame, as some of them merit more of a debate.

One that caught me eye was Customer Recency, defined as:

Recency is defined by the number of days or weeks since the customer has performed the action (purchase, visit, etc.) you are profiling. The more recently a customer has engaged in an action, the more likely they are to repeat the action, especially when encouraged to repeat by some kind of promotional effort.   

The definition is a little wonky, but it gets to an important aspect of customer engagement - how often they interact with you.

To use it properly, you need to normalize it by expected interaction time - so your goal as a food retail outlet is different to your goal as a vacation resort.  Yet in both cases more recency is generally better.

And as the definition points out, you can use the KPI for anything from a purchase, to a visit to a web site, to a phone call, etc.  Any point of contact.  

In fact, throwing all these contact points into a segmentation model and defining behavioral groups based on recency for certain activities is a powerful way to think about loyalty.  This type of analysis give you a window on your customer's 'expected relationship'.

An 'expected relationship' is the relationship your customer thinks they have with you.  They are calling you weekly, buying weekly, using your website daily - they really like you!  Do you know who they are and do you reciprocate in like?  If not, you run this risk of making them feel like the dork in school who chased the prom queen and got embarrassingly rejected.  

On the flip side, does someone log into your website once and give you an email address only for you to start treating them like a long lost friend - sending multiple emails with multiple offers etc.  An equally embarrassing situation and definitely not cool.

Managing the 'expected relationship' through interaction recency (and type) is a powerful way to connect with your customer base.  Or at the very least, managing it so the above embarrassing situations are less likely to happen. 

In the absence of asking customers what type of relationship they want - which is always awkward and not something you do to strangers so why do it to customers - measuring 'recency' is a core component of a Permission Marketing plan. 

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"Chrome" and the Google Brand

I downloaded and installed Chrome the other day.  Chrome is the new Google browser.  

I'm not going to talk at length or postulate on the strategy behind Google releasing a browser - this has been covered on many other blogs.  What I am going to mention is how you release a piece of software with a personality - a Brand Personality - built into it.

Google is a master of this.  Microsoft is terrible.  Various other software vendors fall in between these two extremes.  Apple is a genius at it, although in a very different way.

Here are some examples of Google's Brand Personality creeping into the Chrome product...

1. When you click on the Task Manager in the Developer section there is a small button that lets you see some more detailed information.  Typically this is generally called 'more information'. Or, 'more data'.  Or something very Microsofty, 'Additional technical information'.

In Chrome, its...

2. When you open the 'incognito' window (the one that allows you to surf as a spy - ok, you're not actually a spy, it just doesn't let other people spy on you), there is a list of things that going 'incognito' doesn't protect you against.  This list is important as it's about security and security is a serious issue.  Look at the last two entries...

3. When you choose the Options item from the main menu, a new window appears with some options in it.  There are three tabs.  Usually these tabs are broken down by functionality - maybe a 'General' tab, a 'Security' tab etc.  In Chrome it's...

4.  When you try and uninstall most software products it's a pretty dull, unemotional affair.  You click through the uninstall procedure and hope that the annoying software goes away.  Chrome is easy to uninstall, but it's the first software product that's genuinely polite about it...

These are small things but they speak volumes about the personality of the product and company you are dealing with.  You don't have to like them - not everyone will.  But at least they stand for SOMETHING.  

The difference between companies that inject a bit of their own personality into their products and those that don't.... is courage.  

And that also speaks volumes.

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Political Prediction Markets

I came across a site called intrade on my general web surfing the other day. Intrade is a prediction market. You register for the site and can actually 'bet' money on the outcome of certain events.

There is a long history of prediction markets for all sorts of things from sports to Hollywood movies - 'long' in the Internet sense of the word, which is 'short' in historical terms. Wikipedia has a page giving some good background details.

I navigated my way to intrade as it was mentioned on a political news site. On intrade, McCain is currently siting at about a 40% chance to win the White House while Obama is in the low 60% range. This was interesting as poll after poll puts them in a dead heat.

I looked into the intrade system a bit and it looks fine (I am no expert here but at least I understand it - there are probably some pretty smart people behind it). You buy and sell 'contracts' with other traders and the price of a contract varies between $0 and $10. Each 'contract' has an unambiguous binary outcome and is ultimately worth (at the conclusion of the event) either $0 for it not happening or $10 for it happening.

So if you buy Obama contracts at $6.10 and he wins the election, you get a payout of $10 - $6.10 = $3.90 (minus a commission - finally a Web 2.0 site with a business model!). If he loses the election you lose all your money as your contracts are worth $0.

This is the Obama chart on intrade:

So why does Obama look like a shoe-in on intrade but a lame duck in the polls? Is Obama mania getting into the heads of intrade traders? Do they long for change? Need hope? Feel higher taxes on the rich is the solution to their poor lot in life as traders? Likely none of these.

On the surface it's tempting to equate the prediction market to polling, but it's really very different. The intrade numbers aren't saying Obama is going to win in a landslide 60%/40%, all they are saying is he is most likely to beat McCain - margin unspecified (although you would think there would be a correlation between the strength of the prediction and the ultimate margin - we just don't know what that is).

So intrade traders think, given the current polls and events, Obama is still more likely to pull it off. However, if you look at the Republican v Democrat leanings (a vote that indicates preference for a party rather than an individual), support for a 'generic Democrat' is strong.

Or in other words, McCain is neck-and-neck with Obama despite strong support for a Democratic ticket, an unpopular president from the same party, an unpopular war and an economic downturn.

You would think a logical trader trading in presidential picks would give McCain better odds considering what he as overcome to be even at this late stage. Of course balancing this is Obama's huge war chest - money for political advertising - that will be unleashed in the coming weeks. Obama media saturation here we come.

Although even with that war chest, I don't think I would give Obama much over a 50% chance. He still seems over priced.

Ultimately though, no one really knows who is going to win. Prediction markets for political outcomes are just a stab in the dark as there is no set of logical sequences or historical precedents that point to one outcome or another. There is just a whole lot of future uncertainty.

It's like trying to predict the price of oil. Demand and supply can be forecast somewhat accurately, but Israel bombing Iran's nuclear facilities with no UN backing can not.

I'd like to see the political prediction markets on intrade react when Obama reveals he is the illegitimate child of a certain elderly Arizona senator. It could be true...

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Gold Medal Count

Posting has been light over the last few weeks as we are still gearing up for our move to the West Coast. It's amazing how many things you have to do to shift 2 people, an apartment and a cat (the cat being the most difficult!).

I just came across this cool widget from a new site called youcalc. It's an Olympic medal count you can sort by total, per capita or per some GDP figure.


(if it's not working for you, you can look at it here)

When you look at total medals won by population (per captia), the list changes drastically - New Zealand is in the top 10!.

It's tempting to say the per captia list reflects the real success as medal total 'normalized' by population puts both large and small countries on an equal footing. It's hard to compete on absolute basis when China has 1.5 billion people to pull from!

It's tempting, but also wrong. Population size is a factor only if you have the investment to make it one. India won almost nothing yet is the second most populous country in the world. They invest almost zero in Olympic sports, and it shows.

Many of the small countries on top of the list (Jamaica for instance) have also benefited from athletes attending American schools where investment in track and field is strong. Their success reflects this investment.

I'd love to see a list adjusted for both population and investment in Olympic sports. That would equalize countries a lot more. Although I have a hunch a fully 'normalized' medal table based on per capita Olympic spend in USDs adjusted for athletes that train outside of their country of origin probably won't catch on. Not much of a ring to it.

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Don't click it!!

I came across a fun site today that demonstrates just how much we rely on the ubiquitousness of the click to navigate the online world.

www.dontclick.it

It's actually a piece of art submitted as part of a Masters Degree in Communications by a German student, Alex Frank.

It is both an incredibly annoying yet interesting experience all at once.

It's like having no electricity in a black-out - you don't realize how much you depend on something until you lose it.

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Shifting Marketing Sands

Thinking about the excessive amount of TV advertising I've consumed while watching the Olympics lately, I was beginning to wonder if new Marketing trends were just a bunch of hot-air.

So I pulled the following data from Google Trends.

This is a chart of the search and news volume for three phrases 'social media', 'traditional media' and 'TV advertising' - search volume is on the top, news volume is on the bottom.

Sometime around the middle of 2007 you can see 'social media' take off as a phrase.

Of course, this is old news to Social Media advocates who have been living and breathing this trend for the past year and a half. But what's interesting is the downward trend for the 'TV advertising' line.

Either Jo Public has stopped searching for generic 'TV Advertising', or Marketing practitioners have lost interest. I think it's probably a bit of both.

Watching the Olympics you wouldn't have guessed.

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If car advertising is so meaningless, why is there so much of it?

I remember working for the arm of a car financing company who wanted to understand the entire car-buying process from start to finish.

After weeks of research it become abundantly clear that initial impressions and interest generated by advertising were trumped by personal search, peer recommendations and plain old stubborn loyalty to the brand you already had.

Which makes it even more surprising that most car advertising is deal focused - treating the process as if it's an impulse buy. Sort of like picking up a six-pack of coke at the local supermarket in a 2-for-1 promo.

This deal-focused ad spam mentality has to be sustained by some type of industry insider myth - it just doesn't seem like it should work. And it wouldn't surprise me if it doesn't given the ridiculously inaccurate ways companies tend to measure the ROI of TV spend.

I am mentioning this now as the current oil-price woes have spurred a whole new round of deal spamming car ads that try to convince consumers something that gets 20mpg on the highway is somehow a good investment. As if being top 5 in class for 3-row SUV's with 4-cylinder engines and red bumpers is somehow a meaningful point of differentiation.

Maybe it's because I am watching the Olympics and hence more TV than normal that I am noticing this. Just like I am now noticing the spam ads from my own cable company that try and get me to buy their new Triple-Play package that somehow miraculously costs less per month than the Double-Play package I have. As I have no interest in the additional phone service, these ads are a constant reminder of how badly they are riping me off.

TV advertising is such a waste of time.

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Musings on UI Design

One of the things I have become increasingly interested in over the last year is UI (User Interface) design. As we develop our software product, how it looks and feels to the end user becomes an extremely important part of the process.

And as we are developing it using the latest Microsoft technology, it was interesting to read this interview with Jensen Harris - one of the lead designers for the new Office Ribbon UI in Office 2007. Here is a link to Jensen's blog post on the topic.

The actual presentation Jensen gave is a good watch. It's impressive to see all the data Microsoft collects go to use in the design process (what does it tell you about work habits in the 21st century when the most used function in Outlook is 'delete' - 14x greater than the next most used function, 'reply/send'?).

Having read and listened to the talk, here are my musings on the process:

1. There is no way - no trickery of layout, no fancy use of color palettes, no sophisticated code - that can really reduce the complexity of 250 separate functions in MS Word. The developers and designers are on a collision course with diminishing returns on simplicity. At some point, if a program becomes large enough, it becomes complicated.

2. The Ribbon UI - where all commands area accessed via a tab interface at the top of the page (see here) - is a useful innovation for the 'average' user. This seems to be partly the reason it was developed - to help more people use and utilize more functions. However, it's not necessarily an improvement for the 'power user'. It lets you master more functions, but doesn't allow significant depth of mastery - the kind of depth that allows you to completely customize your UI experience.

3. The most significant UI design conundrum is designing for both the 'average' and 'power' user.

4. Don't be afraid to give the user 2 or even 3 ways to access the same function. They will figure out the way that suits them the best. Everyone is different.

5. Don't give the user 2 or 3 ways to access EVERY function - they will come for your head. The art in UI design, like all good creative endeavors, is to know when to stop.

6. Get out of the way. Don't let the UI dominate the experience. Great UI's are like hazard lights on a car. You should never notice them until you need them. And they provide a useful function.

I don't think the Ribbon UI meets all of these challenges. It still seems bloated. But then, going back to point 1, you can't design away complexity. You can only design for it.

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The Importance of Scale

I'm struggling through a busy patch at the moment so posting has been light recently. My wife and I are gearing up for our move to San Fran later in the year (we currently live in NY), so there is a lot of stuff to sort out - not least of which is shifting a cat 3000 miles.

So I am taking a moment to post about something that I have been increasingly coming across - the importance of understanding 'scale'.

And by 'scale' I mean things that scale on some type of exponential curve. The Long Tail describes the scaling process inherent in the aggregation of markets for certain types of goods. The ubiquitous 80/20 rule describes the typical scaling of customer revenue. And in Clay Shirky's book, Here Comes Everybody, he points out that in social interactions, these Power Laws (as they are called) are everywhere. This is a Power Law:


While Power Laws have been written about extensively, I don't think they are well understood. Mostly because, as human beings, we live in a very linear world. We're not good at understanding things that scale exponentially. Power Laws are all about extreme scaling. Mostly though feedback and multiplier effects.

A good example of this mis-understanding is the Sprint campaign that was widely criticized on blogs and social media sites. One of the criticisms leveled at it was the auto-response email you received if you tried to email the CEO (who gave out his address at the end of the TV clip). It's a fair criticism. A personal appeal from the CEO doesn't feel very personal if you get a canned response back. But it's not surprising. On the graph above, Sprint occupies a position near the steep part of the curve. It has millions of customers. The CEO can't have a conversation with each one of them.

I heard people comment that Sprint should have just hired more people to respond. And that if smaller companies can do it, why can't they? Customer numbers follow a power law - the more customers you have, the more you get, the more you spend on getting more, etc. Social media tactics - two-way conversations, dealing with customers as individuals, having tailored conversations, etc. - don't work as you climb that curve. They can't. You can't add resource to deal with those conversations at the same rate as you acquire customers because you can't add resource exponentially and stay in business.

A lot of Social Media pundits talk about the 2-way nature of conversation these days not understanding that what works for a 100 person outfit is not going to work for a company ten times larger with 1000x the customers because of the way customer numbers and resource scale. Joseph Jaffe's Delta Skelta debacle is a good example. As is the Target example.

In Jaffe's case, he's right to want to claim compensation for what happened to him, but wrong for thinking Delta can somehow treat him differently on the merits of his individual issue. He's probably one of a few 1000 people they need to deal with on a weekly basis. A simple policy for his situation is the most efficient way to deal with it. A full-blooded, tailored conversation for his individual needs is not. The fact that he got a direct response from Delta is more a reflection of his standing in the blogging community than his value to them as a customer.

Now I'm not saying that having a canned email or a standard policy letter is 'good' - in the sense that it is the best type of customer interaction. It's not. All I'm saying is that it's a realistic response to this issue of scale.

Shirky makes this same point when talking about weblogs in his book:

As is normal in a power law distribution, most writers have few readers. Such readers and writers can all pay similar amounts of attention to one another, forming relatively tight conversational clusters... As the audience grows larger, into the hundreds, the tight pattern of 'everyone connected to everyone' becomes impossible to support - conversation is still possible, but it is in a community that is much more loosely woven... Once writers start getting more attention than they can return, they are forced into a width versus depth trade-off.

Essentially, as reader numbers scale exponentially, the blog writer has no hope of increasing their 'attention resource' in a similar way. You can't add attention exponentially. You don't have enough of it to start with!

The Sprint CEO knew this before he set out. There was no way he could have a conversation with everyone who saw that ad. Hence the canned email. And to be honest, he was silly to try. He held out the promise of such an interaction knowing he could never deliver. That's not a great tactic.

Companies like Sprint and Delta and other large entities that exist on the steep part of that curve need to get away from this notion that they can profitably sustain 2-way conversations with their customer base. Companies that exist further down the curve absolutely need to keep those conversations going.

Where 'scale' starts to be an issue, other types of strategies need to be employed. Social media holds out huge promise for self-sustaining group collaboration by customers - initiated by companies. Company as enabler makes much more sense than company as sounding-board.

Sounding-boards are only good to rant at. There is no future in being a sounding-board.

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The Point

I am about half way through Clay Shirky's new book, Here Comes Everybody. I had read some initial critical reviews (which I can't find the link to anymore), but I think they were misguided. It's a fascinating book about the way we organize ourselves and how the Internet has changed 'organizing'.

I'll look to write a review after I have finished it (hopefully soon), but I thought I would make a quick post about The Point.

The Point is a website for organizing group action. It's the purest form of 'Internet Organization' I have come across and is a shining example of the central tenet of Shirky's argument - it's not so much that the Internet 'brings us all closer', it's that it removes the inherent 'cost' of organizing.

There is an important lesson for Social Media in there. It's not about interrupting people's conversations or even being a part of them (brands have no purpose or right to inject themselves into private conversations), it is about using Social Media tools to mobilize (organize) customers who share your brand as a common interest.

What you organize them around is up to you - but the options are limitless and the cost negligible.

That is the real power of Social Media.

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Visualizations as Metaphors II

I wrote a post a while back about using visualizations as metaphors. Seth Godin recently posted about how useful he found pie-charts when compared to your average bar chart. He got a lot of flak for this as most visualization experts will tell you the opposite - that bar charts are a far superior visualization tool.

I believe Seth's point was similar to the one I was making in my first post - that sometimes a purposely overt graphic (such as a single pie with one large piece sticking out) is the best way to make a point. You could structure it as a metaphor, or it could be a simple exaggeration. Some political 'data spin' maybe?

The reason Seth thinks like this is because he is a Marketer. Marketers spend their lives (inside and outside their company) trying to convince people of things. To a marketer, a presentation that presents just the facts is pointless. Facts without an argument that in some way enhances the Marketer's agenda is a waste of time.

This is a good thing. You're paying your Marketing people to have a point of view.

To many data visualization experts though (and scientists), facts are these pure things that need to be wrapped in cotton wool and protected from opinion and false hypothesizing. Hence their dismay at the misleading pie-chart segment size error in displaying quantitative information.

The gulf here, between Marketing and most data visualization experts and BI (Business Intelligence) people, is about the size of Texas.

But you need both points of view. Marketers who get paralyzed by facts tend to do a poor job. I know too some people that will sound strange, but we're not talking about denying the existence of gravity, we're talking about challenging or changing perceived norms. If you get too caught up in why x number of people don't do y, you are never going to try and figure out how to make y work.

Likewise, show me a company run by data visualization experts. No more commentary necessary.

What you really need is a mix of both mentalities. You need enough understanding of numbers and graphs to know when to break the rules. And enough respect to know when not to.

I think Seth has a pretty good balance.

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Why Social Media isn't a strategy

Gareth over at Brand New posted a short musing on why we need to concentrate on building Social Brands rather than executing Social Media campaigns.

I agree. And I've said it before, Social Media is not a call to inundate the web's social channels with advertising, it's a call to change the way you do business.

Why? Because the Web has changed/is changing the way people work and play. It's not simply another media medium.

Your brand/company exists in two places these days - its physical existence (where you work, the employees, the products, the infrastructure) and its digital existence (its website, search engine presence, online conversations about its products/services, customer complaints and compliments, etc.) . The digital presences needs as much care and thought as the physical one.

Imagine if a customer tried to contact you in the 'real world' and you had never thought to put in a phone line or build a door to your front office? We take these things for granted in the physical world - it's laughable to think of a company without a phone system, or indeed a front entrance!

Why do we NOT take them for granted in the digital world? Why do all companies not have blogs? Why won't some respond to online conversation? Why is it difficult to find the email address of the CEO? Why do they ignore customers trying to have fun with their brand or product?

Why? Because they are not paying enough attention to their digital presence. Not managing it properly. Not investing in it. And not using any of the tools consumers are using to help them navigate this new frontier.

As long as 'digital media' is relegated to a subset of Marketing and 'Social Media' a subset again, this will remain the norm.

Social Media is not a strategy, it's a call to manage your digital presence with as much care and thought as your physical one.

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Bryan Appleyard's interview with The Black Swan Author

Bryan Appleyard (author of Understanding the Present) has interviewed Nassim Nicholas Taleb (author of the Black Swan) for his Sunday Times article. You can read the interview here.

Of all the books I've read in the past 20 years, I'd have to say that both of these authors have left the most lasting impressions. To see Appleyard interview Taleb is a real pleasure.

Both authors go against the grain of common thinking about science, mathmatics and ultimately how we view our own world. It's about time a lot of that thinking was shook up.

I highly recommend reading the interview.

Here are Taleb's top life-tips (from the Appleyard interview):

1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2 Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3 It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

4 Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can’t control outcomes, you can control the elegance of your behaviour. You will always have the last word.

5 Don’t disturb complicated systems that have been around for a very long time. We don’t understand their logic. Don’t pollute the planet. Leave it the way we found it, regardless of scientific ‘evidence’.

6 Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.

7 Avoid losers. If you hear someone use the words ‘impossible’, ‘never’, ‘too difficult’ too often, drop him or her from your social network. Never take ‘no’ for an answer (conversely, take most ‘yeses’ as ‘most probably’).

8 Don’t read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants... or (again) parties.

9 Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.

10 Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.

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The Pirate's Dilema

Sean over at CrapHammer (got to love that blog name!), posted a link to a short video promoting the new book The Pirates Dilemma, by Matt Mason. Here is the video.



It definitely looks like it would be worth a read. It's hard to argue that youth culture hasn't/isn't changing the media landscape. Whole institutions are crumbling because of it (read traditional media outlets).

What struck me watching the video though was why the attention on pirate culture now - as the video goes into some depth to explain it as a common historical trend? It comes down to music (and potentially movie) piracy. And it's an economic argument. Never in the history of media has the means to reproduce and share it been so easy and ubiquitous.

So does that make everyone a pirate? Or are some of us sort of free-loading pirates? More akin to looters running through upturned cars than pirates who seek riches and fame plying their trade?

I think there is a distinction there. Subtle, but important. And I know people who fit into both camps.

I think I am off to buy the book... or steal it if possible :)

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Microsoft marketing success story

You don't rarely come across examples of Microsoft's marketing prowess, so when you do, it's blog-worthy (at least to me).

I was looking around for the latest information on Windows Server 2008 and came across this. (if you click it might ask you to install Silverlight - this is MS's latest web technology, similar to Flash but based on the .NET architecture so it's pretty powerful).

If you can't get to the link or can't see it for some reason (probably making the whole thing a failure in your eyes), MS has taken 'personification' to a new level. The page is a cool animation of a robot called 'IT 24/7'. It has links to information and videos about Windows Server 2008.

The brilliance is all in the imagery. Windows Server 2008 is all about lean, tough, easy to use, server software. The robot 'personifies' all of these traits. If you watch the videos it's like an aerobics instructor on steroids. Running, jumping, 'doing fitness classes in its downtime'. Its standing position on the load page looks like it is about to jump through the screen. It epitomizes 'action'.

The targeting is spot on. Most IT guys play video games. Microsoft also has huge equity in this space with the Halo franchise. In fact, some of the load screens for the Silverlight page could almost be mistaken for Master Chief.

The message is clear. Everything is done on message. Information is easy to get to and most of the major topics regarding server software seem to be covered. They don't waste time with 'content' for content's sake. It's like the anti 'gorilla' spot. Yet both seem to work.

Overall, one of these rare occasions where it all just seems to click. It works for the audience, works for the brand and is both entertaining, informative and memorable. All the things it needs to be.

'Pragmatically creative' is how I would describe it - I am beginning to love that term.

However, I haven't signed up for anything or found other ways that make it obvious how you can participate - other than the standard 'download this desktop background'. So they get 10/10 for creative execution and strategy, but the jury's out on the conversation/social media aspects of the campaign.

I couldn't find 24/7s Facebook page - even though it's kind of an obvious move.

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New Long Tail Debate

If you read this blog a lot (ad thank you for those of you who do!), you know that I have been following the work of Chris Anderson for a while - his Long Tail theory and the newer Free movement.

Chris recently posted a rebuttal to a Harvard Business Review article by Aniti Elberse criticizing some aspects of the Long Tail theory. Anti is a Professor of Marketing at Harvard Business School.

The debate boils down to the fact that Elberse's analysis of new data found that the Long Tail is increasingly flat (i.e populated by less and less popular titles as inventory grows) and that consumers, even consumers in the Long Tail, prefer the 'hits' more (the popular stuff).

Both to of these findings seem pretty obvious to me. Online retailers are always going to keep adding inventory as long as inventory costs are close, if not at, zero. And consumers will always tend to gravitate to popular titles - at some point. Popularity is multiplicative. The more popular something becomes, the more popular it becomes.

However, I believe she misses the point of the original Long Tail argument when she says that these results undermine the importance of the Long Tail as a business phenomenon.

The Long Tail is an observation of optimal product portfolios for two very different delivery mechanism. The two things that make the Long Tail work are close to zero inventory costs and a system for recommending and searching content. Both of these facts predict her findings. More inventory is inevitable, and with recommendations still playing a big role, popular products are very likely to remain popular.

Anderson's theory was never about the death of the 'hit'. It was about the rise of the 'tail'. These things aren't mutually exclusive.

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The game has changed

I just read this post by Alan (Toad) of the Toad Stool. He has really hit the nail in the head regarding the changing world of advertising and how some companies really are stuck in the past.

In today's world, product performance is too transparent for advertising to have any significant persuasive effect. People don't look to ads to inform them about quality and performance, they look to Google.

End of story.

I met Alan for the first time at a social media panel discussion we did the other day (more on that in a later blog post). Alan is one of those ad guys who is refreshingly creatively pragmatic.

I am pretty sure that is a compliment.

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BabbleSoft Blogger moving on

I've been a fan of the entrepreMusings blog for a while. Aruni (who writes it and is the founder of BabbleSoft) is fun to listen to. And she always had/has great advice for new companies and entrepreneurs.

It turns out she is moving on (sort of) from her BabbleSoft position to a new J-O-B. It's tough times out there at the moment for new companies. And she has had a hard time convincing investors to take the plunge with her on BabbleSoft - which is kind of a web/mobile based parenting support tool.

As she points out, it's really a new market, and convincing investors to invest in creating demand in a tough economic climate is an up-hill task.

I wish her all the luck in her new endeavor and I hope BabbleSoft continues (she will be working on it part time).

I really think only crazy, ignorant and insane people start companies. And only people who start companies see any of those traits as assets. Aruni always struck me as a little bit crazy.

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Forrester Blog ROI

Early last year Charlene Li of Forrester fame wrote a report on blogging ROI. I saw this pop up in a recent presentation and wondered if you couldn't improve on some of these metrics.

Here is the list (you can click on the image to enlarge it):



















Not a bad framework for understanding how to value a corporate blogging effort. But I would change the following:

1. Blog Traffic - unique visitors to a blog is a pretty useless measure from both an effectiveness standpoint and as a stand-in for advertising cost. This is because blogs tend to have a very high bounce-rate - the number of people who come to the blog and immediately leave because it wasn't what they were looking for. This is just an artifact of 'search', not a blight on the blog itself. Advertising, in contrast, tends to get served up in places where it at least has some relevance to the page/site/task at hand. Not really an apples-to-apples comparison.

I would suggest equating non-bounced blog traffic with the value of click-through advertising traffic (not impressions). So how much you would have paid to get the equivalent number of people to click on your ad in said content channel?

2. Press Mentions - Having your blog talked about by the press is an obvious direct substitute for PR cost. If the talk is positive, all the better. Ironically, I think equating this to advertising cost in the publication probably undervalues it. People are far more likely to remember a mention in an article than an ad. Although I would value this on a case-by-case basis. Not all publicity is good publicity. Believe me, it's not.

3. Technorati and comments - Not every blog has a Technorati ranking so this may or may not be a useful measure depending on the industry you are in. Comments as equivalent to a 'buzz agent'? I've never hired a 'buzz agent' but I would imagine they might be a bit put-out by comparing their efforts to blog comment numbers. Buzz agents can move a lot of interested traffic to your site and that traffic might turn into comments, but it's probably qualitatively different from just general comment leavers - who are more likely to confine their WoM to your blog and your blog only.

Track-backs and Technoarti mentions are probably best valued by the cost of a 'buzz agent'.

4. Comments as customer insight - A complete farce. In the article Forrester equates $180,000 worth of qualitative research to 100 comments on a blog a month. That's effectively turning qualitative research into a sophisticated suggestion box. Which it isn't. Good qualitative research is commissioned to solve difficult issues - brand positioning; deep (very deep) consumer understanding (think about the difference between a blog comment and an ethnographic study); communication testing/evaluation; etc. If you are using qualitative research to get a few ideas every now and then from consumers, you are wasting a lot of money.

5. UGC and NPS (User Generated Content and Net Promoter Score) - I can see where they are going on this one, but it depends on establishing a robust relationship between sales and NPS. I had a look at the NPS's historic relationship to sales in this post - not a pretty picture for that industry at least. I haven't used NPS extensively, but can't help feel a little dubious about its link to sales (this is not going to be the case in all industries, there are bound to be some success stories. As part of the value equation for a blog though, it needs to be looked at on as case-by-case basis).

6. Leads - This one makes a lot of sense. Blogs can generate sales leads. Pretty easy to measure as well - "where did you hear about us?". Probably one of the most tangible value results.

So over all, while some of these metrics need to be tweaked and others (the consumer insights one in particular) ignored, it's not a bad framework.

It's the sort of thing I can see presented to the CEO or CFO as an honest attempt at valuing a social media effort. It might not be exact, but it's probably not going to be significantly distorted.

Of course, blogging and social media have flow-on effects that are harder to measure (honesty, trust, openness, closer connections to customers) but equally as important.

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Do Facebook ads rock? #2

A couple of weeks ago (that's 2 for anyone working at Panera's and handing out scones), I made a post about Facebook ads in response to Bob's post over at The Challenge Dividend.

Bob was kind enough to come over here and comment on the post. It pretty much backed up his original assertion that Facebook ads don't work. At least not nearly as effectively as you would think given the hype around social networking sites.

My post was one of two experiments. The experiments dealt with placing a text-ad on Facebook that pointed to an online Guitar Hero type game. It was just a small add that talked about a new version of a cool game. The kind of pass-the-time thing you would expect a majority of Facebook users to like.

In the first experiment, I ran the ad for a week and got 154,565 impressions among people who had expressed an interest in Guitar Hero in their Facebook profile. Of everyone it was served up to, 70 people clicked on it. A click-through-rate (CTR) of 0.05%. Summarized here:

In the second experiment, I dropped the requirement to have an interest in Guitar Hero to test how well a non-targeted ad performed. Results:

The CTR more than halved. This is exactly what you would expect. But it is different to Bob's original post where targeting didn't seem to have any effect on the CTR.

Bob's ad may have been a one-off. Maybe he got lucky on the CTR for the non-targeted audience? I'm not too sure. But targeting on Facebook does work. Which was my original bone of contention with Bob's conclusions.

However, the CTRs are still BAD, very bad. Targeting doubled the performance of the ad (0.02% to 0.05% CTR) - but that is like going from very crap to crap. Even average banner campaigns get to 0.1%.

Based on the cost per click, if I was selling anything on my website (assuming a below 5% conversion ratio) I would need to absorb around $20 per item sold on customer acquisition costs. Fine for some things, horrendously expensive for others.

The low CTR's on Facebook are a problem. They confirm that advertising really is the last thing you want to pay attention to when you're on the site. Maybe even less so than usual.

Like so many other things Web 2.0, it's an idea in search of a business model (Twitter anyone?).

Media was always bought on 'attention'. The new currency is 'intention'. Facebook needs to find 'intentions', or derive them in some way. Its current targeting is not cutting it.

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Annoying surveys, again...

I wrote about annoying customer service surveys here.

I recently started using Skype and after every call, EVERY CALL, they ask you about the call's quality. Bad mistake.

In trying to find a solution to this problem, I came across some great examples of why over-surveying is a bad thing. From some forum posts:

"If i would have know that every 3rd call, it's going to open up my web browser with no ability to toggle it off, i would have not purchased it. In addition, i (ALWAYS) click on the lowest rating when it brings up that quality feedback web page, despite how really wonderfull the quality of the call was, just due to not being given a choice about the popup."

"Why not let users have the choice of giving feedback or not ?
Since eBay took over I've seen a variety of these type of things that control your user experience.
Like the previous poster, if we all put in negative feedback in the voice quality page perhaps Skype will realize that the loss of real feedback is a serious enough problem to allow free choice for the user."

Amen.

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Some thoughts on advertising... from a tech guy

Phil Wainewright writes a blog over at CNET about Software as a Service (SaaS). SaaS is a very hot technology these days (and has been for a while). It's also one I'm intimately involved with as we're building our business around it.

SaaS is about application development so it's not surprising that many SaaS commentators (like Phil) end up talking about application monetization and hence, advertising.

Phil's stance is that the ad sponsored application model is fundamentally flawed. I agree with him, but not for all the reasons he states.

He lists three main arguments:

"1. Advertising is the creation of a disconnected era when businesses needed some way to get a message out to prospective customers that they couldn’t reach directly. The purpose of an ad is to motivate the prospect to get in touch. The Web, as we all know, puts us all in direct, real-time contact with each other, wherever we are in the world. Instead of advertising a message and waiting haplessly for a response, businesses can proactively connect directly with their prospects, reaching out to them in contexts where they’re ready to buy. What counts on the Web is product placement, merchandising and other forms of direct promotion."

Advertising wasn't created because we were 'disconnected', it was created because we were CONNECTED - connected in the sense that we watched the same shows, read the same newspapers and listened to the same radio stations. It exploited economies of scale as a many-to-one communication medium. It was/is not, as Phil seems to think, a sales tool. Most advertisers don't want people to 'get in touch', they want them to buy a product. This is just confusing the role of Marketing and Sales.

"2. Placing ads in software is the height of absurdity. It’s software for goodness sake — people use it to get things done, not to read ads. Instead of wasting valuable screen space publishing banners and text ads, why not embed some functional links, buttons and menu options that add some value to the task in hand? Cut out the ads and substitute a direct connection to a useful service. Add a pay-per-use clipart library to an online slideshow editor, embed a link to a live tax expert in an online accounting application, build workflow into an online travel booking service that conveniently helps the buyer choose and book flights, transfers, hotel and dinner."

Couldn't agree more. But there are some glaring examples of where advertising in apps does work. Gmail for instance. Contextually relevant adds alongside email topics are actually useful. Just as ads for clip-art, photo services, or design services would probably get a lot of traffic in an online presentation tool. Making ads relevant to the task at hand is the key. And the ability to mash-up services in apps could potentially blur the line between an ad and a service. Where does the ad stop and the service start? Desktop gadgets are a good example of ad/services that meld nicely with workflow.

"3.There will never be enough online advertising in the world to support the software industry, let alone the entire Web. Below is a slide taken from a presentation I gave a couple of years ago to an auditorium full of marketing professionals, called (you guessed it) ‘Web 2.0 and the end of advertising’. While it’s true that software is a smaller industry than advertising, both of them pale into significance when you look at the entire value of the retail industry — or even more if you measure the total value of a year’s global trade. Instead of trying to carve up the bite-sized advertising pie, on-demand providers should claim a slice of all those real-world transactions by making it easier for sellers to find buyers."

Agree. The most powerful monetization strategy is to match buyer and seller. But the potential pie is a lot smaller than Phil makes it out to be. Transactions completed online is a better yardstick than retail in its entirety, or global trade (that last one is really stretching it). And then all the easy apples have been picked - search, online auctions, online retail, local search, etc.

I think argument number two comes closest. Ads in apps are just stupid. Especially if they have nothing to do with the task at hand.

Phil finishes with an insightful paragraph on the future of monetizing worklflow:

"There needs to be a reliable infrastructure for measuring whatever is due to each partipant in the partnership, and there needs to be highly effective workflow so that the user experience is seamless and convenient. The ease of funding everything through advertising has meant the giants of Web 2.0 (and many venture-funded startups) have neglected the more sophisticated infrastructure needed to support such functionality."

SaaS companies participating in a web of interconnected services that support workflow and carve up the proceeds is the future of application monetization. This will triumph advertising every time. Pity it's almost entirely fiction at the moment.

But that will change.

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What can we learn from gas prices?

I just caught this CNN article on the current state of gas (fuel) prices in the US. According to the article, the month of March 2008 saw the single largest fall in 'driving' by US residents since records began in 1942 - a 4.3% decline (or 11 billion fewer miles if that percentage decrease didn't feel large enough).

The fascinating thing about this reaction is that it's almost pure sticker shock. The article talks of whole families foregoing Memorial day camping vacations to set up tent in their backyard! As if the cost of gas has become so great as to preclude using it at all.

But this just isn't the case. Yes, the average gallon of gas in the US is now just shy of $4 ($3.93), but it's only 70c more than it was a year ago. 70c per gallon translates into $10-$15 more for a tank depending on your car (more for a large SUV). Those aren't break-the-bank numbers.

The reason for the decline is the price points that people are now seeing - $60, $70, $100 fills. When you are used to $46.73 for a tank and you hit $60, sticker shock kicks in - that familiar feeling of 'it can't be that much? Really?'.

As human beings. our thought process in the face of rising pump prices is:

I can handle that.
That's a lot, but within my budget.
Woa, that's pretty high, grin and bear it.
No, that's way too high - kids, we're camping in the backyard this year!

We hit a ceiling. A threshold that we can't/won't pass. We don't, as many people think, gradually reduce our level of demand at each increase. It only looks like that in aggregate.

This has implications for marketers setting prices. While you look at the overall numbers and see this perfect relationship between price and demand on aggregate, think instead of the thresholds you've crossed.

You need to ease people across thresholds. Good sales people know this instinctively. Marketers less so. But they also have the harder job.

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Do Facebook ads rock?

Ok, so I finally got around to the blog this week. Has been a hectic few days.

Over those days though, I have been running a test Facebook ad campaign to try and add to the available knowledge on just how useful FB is for advertising.

In my last post I talked about The Challenge Dividen's post looking at FB ads. Bob ran a FB campaign to attract Guitar Hero fans to his site. He achieved a 0.02% Click Through Rate (CTR) for his campaign. Pretty low. He also found that the CTR didn't differ between a targeted campaign and a non-targeted campaign. Which I found strange.

I left a comment on Bob's blog and we had a bit of back and forth. He challenged me to come up with some numbers. So I went away and made a FB ad.

Bob's basic argument was that FB ads are broken. At a 0.02% CTR they under-perform the industry average (for banners) by about a fifth (ie. they are one fifth as effective).

In my test, I managed to more than double his CTR by targeting a Guitar Hero friendly add to the Guitar hero fan base on FB. My ad's summary is here:

The add was this:It's basically the exact text on the front page of an online Guitar Hero type game. It's actually a really fun game. And not surprisingly, got more attention and clicks than Bob's ad - which was a site you could view people playing Guitar Hero.

So I got a 0.05% CTR. Wow you might say. Well, not so fast. I can see Bob typing right now. Yes, these are meaningless numbers. Basically, a FREE online Guitar Hero game shot out at a Guitar Hero loving population on a site, Facebook, where time-wasting games are a dime a dozen, I get a pitiful 0.05% CTR. Better than Bob, but still crap.

Another nail in the coffin for FB advertising. Run like the wind Microsoft or figure out a better way to monetize the social graph. Ads aren't going to cut it.

However, I actually set out to try and find why a targeted and non-targeted FB add would perform to a similar level. That is still very strange to me. So the next installment of this will be looking at a non-targeted add run over the same time period but a week apart.

If FB targeting ends up not working (again), then they have not only got a medium where ignoring the ads seems the norm, they can't even boast reliable user profiling. In my book, that has equally large implications for potential advertisers.

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Facebook ads don't work?

Interesting post over at The Challenge Dividend that talks about the experience of one Marketer's Facebook ad campaign.

The cliff-note's version is that a highly targeted Facebook ad campaign for a Guitar Hero live-streaming gig had the exact came Click-Through-Rate (CTR) as a completely un-targeted buy. Ergo, Facebook's advertising system is bunk.

The thing that caught my eye is that typically targeted messages of any sort do do better. It's very strange to find a targeted message doing the same or worse among a targeted group compared to shooting the same message out to the unwashed masses. It's more a statistical phenomenon than anything. Given two populations, one with a lot of Guitar Hero fans who find anything Guitar Hero fascinating, and the other with a whole lot of random people (including the odd Guitar Hero fan), the Guitar Hero message will do better among the Guitar Hero population. Assuming the message is relevant to Guitar Hero fans and that all Guitar Hero fans are similar in their preferences to Guitar Hero messages.

And these are pretty sound assumptions to make.

Ergo, if the CTR was the same among both populations, it's saying that Facebook simply isn't good ad identifying all its Guitar Hero fans. It's not necessarily saying that advertising on Facebook is broken and people are simply not interested in anything interrupting their socializing.

In truth it's probably a bit of both. I certainly don't use Facebook (when I use it, which is rare these days) to click on ads. But I don't use the Internet to click on ads either. Unless I am searching of course, then I find the ads all very highly relevant.

I want to look at relevant ads. Everyone does. If Facebook knew me better, it might be able to do that.

I'm a Guitar Hero fan, I just never told them.

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"How to run your car on water"

No matter how good your idea is - solving world hunger, solving world peace, finding a cure for cancer, or single handedly radically reducing the world's dependence on fossil fuels. If you don't give some thought as to how you're going to sell it, it won't sell.

And you end up with this.

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Another pitch for text analytics gone awry

This recent Marketing Profs article was penned by David Bean, Ph.D. - the founder of Attensity, one of the largest text-analytics companies around.

I think it, again, misses the mark. And, again, this is not in any way a criticism of David, his company or text analytic tools in general (I really like these tools). It's a criticism of how they are currently getting pitched.

A good portion of his article argues against traditional research methods in favor of harvesting unstructured conversational data from consumers and customers. There are two major problems with the assumptions behind this argument.

Firstly, traditional research methods, by and large, are not broken. David refers to traditional research methods as struggling to 'make sense of it all'. As if they are somehow unfocused. Yes, research practitioners come across unfocused briefs, but they are not the norm. The norm is to have a clear objective. Most research gets commissioned when there are some specific issues afoot. A lot of this research solves these issues effectively. And it does it without asking consumers questions like 'So what do you think would make this better?' - which, in most situations, doesn't get you any good answers.

Yes there are bad examples of questionnaires and focus groups. But this is usually the practitioners fault, not the methodology (if you're having a hard time finding a good research firm, drop me a line, I can point you in the right direction).

The irony in David's article is that after a page of argument against using structured research to solve issues, he pulls out a quote from a structured research study to prove his point! (470 responses from Planet-feeback.com is not the best source to understand the 'trust in advertising' issue).

Second, there is an assumption that unstructured data is more useful to understand everything from new product ideas, effectiveness of marketing campaigns, product positioning, etc. This is a tall order. People will write in to companies with emotionally laden stories of how they were helped/liked/loved/made to feel good, or the opposite. But they rarely talk about how the brand 'needs to be slightly more edgy to really make me like you'; 'I loved your ads but you need to change the color tones to more suit your brand's style; or 'here's a product idea for you...'. Fanciful stuff.

The myriad of stories you receive from customers need a solid layer of interpretation before they become useful. This typically involves structured research.

The gist of my argument is don't try and create a cure for a disease that doesn't exist. Text analytics is a great augment for your research and intelligence gathering efforts, not a replacement for them. I know there is a need to go after an internal budget when selling in a solution like this. And there is pressure to justify the cost. But this argument will be a tough sell.

A good text analytics tool is like a radio. Without a radio, you can't tune into a radio channel. You just get a bunch of meaningless static. Meaningless static is what most companies hear when they try and listen to consumers or customers. A text analytics tool gets you access to the channels you need to listen to. From there, you can decide what you need to know in more depth.

The problem with a radio is that it is one-way communication. You can't direct the conversation. This is a limitation of the medium. It's not a selling point.

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Agile Marketing

I am doing some work at the moment for a client who is trying to measure innovation inside their company.

Depending on your type of company, this can be easy or hard. And there are a lot of resources available to help - most notably this government report commissioned last year to look at innovation in the US economy (I link to it only because it was written by of a bunch of CEO's and business leaders, not just academics, which means it has a nice practical focus).

A recent post by Gareth over at Brand New also got me thinking about innovation in Marketing. He talks about an 'option investor' approach - you dabble in a range of different activities and see what gains traction. The activity range is like your innovation sand-box. And in Marketing this can contain a lot of toys - new media, old media, social media, digital whatever. Innovation comes from trying/testing a range of things rather than just thinking and planning the 'one big thing'.

This kind of idea also matches closely with a theme in technology startups - where many people advise you to build, test, re-build, test, rebuild, etc. A very trial-and-use focused way to develop. It actually has a name - Agile Development.

So what about Agile Marketing - a very innovation, test and trial Marketing effort rather than thinking and planning one big thing? Makes sense.

Looks like I am not the first person to coin the phrase. Back in 2006 Matt Blumberg, CEO of ReturnPath actually blogged about the exact same idea - again borrowing from the software development world.

I think it's a really interesting way to think about Marketing in today's world. Throw away the 100 page plan and just concentrate on executing in phases that have clear goals and at least some way of measuring success. The key is keeping goals manageable and constantly tweaking your approach.

And don't be afraid to just try things! I always cringe when I see my ex employers web-site - it still has a reference to Netscape Navigator and IE4 on the splash page. It doesn't take 2 years to change a website!

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Size matters...

I got an email the other day from the MarketingProfs people saying research has shown that the size (denomination) of bills consumers carry affects their willingness to spend those bills.

Apparently, if we have a larger bill in our wallet, say $100, we're less likely to break it to buy a $10 item than we are to fork over $10 or two $5s. Carrying around large bills therefore affects consumer spending - effectively lowering it if bill denominations are high.

I haven't read the whole article, just the summary. But this makes sense to a point. Human beings are bad at valuing things. It's understandable that we think a $100 bill is more 'valuable' than five $20s - it's rarer for one thing, and rarer generally means 'worth more'.

However, it's also easier to carry around and harder to change - so there is a convenience factor in there as well.

The summary claims that banks can somehow affect consumer spending by giving out smaller bills. I think this is a bit far fetched. Again, I haven't read the article, but from what I know about consumer behavior I would argue that the relationship between 'perceived value' and actual value of different bill denominations goes something like:

You might be able to give the $50 a 'perceived value' score higher than the $20 (rather than the same value), but not by much. And as most banks shell out $20s at ATMs, I can't see moving to $10 or $5 having any affect whatsoever.

Ok, so this is, again, me not reading the article. I'll now go and try and find it to see if I even came close to guess the right relationship.

Ugh, it's in the Journal of Consumer Research - the greatest collection of practically useless information known to man.

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Tell it with a chart...

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Text Analytics Revisited

A week ago I posted about the Attensity text analytics tool that one of my clients was looking to purchase. The post garnered a bit of interest. Most notably, Sid Banerjee of Clarabridge (a competing product) left a long and well thought out post on how he saw the market unfolding and how his company was positioned in it.

I wanted to do a follow-up post as I still think there are some issues with the way these text analytics tools promote themselves. This is not at all a commentary on their value to an organization - I think they are extremely valuable - it's more a comment on where I think the sweet-spot is in promotion of the idea.

My comments...

• Don't be a tool. Anyone can claim to make a great hammer, but few people wield it expertly. You have to concentrate on selling solutions - which means knowing what the problems and issues are.
• Don't be vague about what it is you do. Be careful in the promotion of any slogan with 'insight', 'actionable insight', 'transform', intelligence', 'actionable intelligence', etc. You get the idea. These are meaningless at the coal face. Be proud (and promote) real problems client's have solved using your tool. This gives prospective clients a far better idea of how it might apply to them.
• Don't try and re-write the rules of marketing and branding. Yes these tools can be good, but they are not substitutes for traditional research methods. Believe me, you're going to come off looking like idiots if you get into a debate over the merits of text-analytics versus customer qualitative research. There is a whole different spectrum where text-analytics is useful, and it doesn't dovetail with traditional research as much as you think.
• Sell as high up as you can. While these products are probably understood best by analysts, you want to sell them to CEOs. Any intelligent CEO is going to do a quick back-of-the envelope equation on the number of feedback points they have, the huge amount of information from these points, and the time and man-power to process it (or the opportunity cost of not-processing it) and realize the tool is worth it. Then tell them to factor 5 year growth in information received and they might just write you a check on the spot.
• Don't use a technology story. No one cares. Gartner analysts might. But they are just strange. Marketers in particular don't care about technology - at least not in a geekish way.
• Under sell. Text analytic tools are very powerful for certain problems. At some point, people 'get it'. They see what it can do and their eyes light up. Under-selling it lets them add enthusiasm. You want them to be enthusiastic, not you.

These points are of course based on my limited experience of seeing text-analytics sales presentations. So digest them with that in mind. But I do think they are all valid.

Like Sid pointed out, I think this whole area is really exciting and well timed given the huge amount of information flooding into companies these days. Sorting through this information is no small task.

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